Cramer: The Nat Gas Revolution Begins

When we look at the tipping point as to what caused U.S. trucking companies to switch from diesel to liquefied natural gas en masse, it will be an odd one. Indeed, it will be when the oil bottleneck in Cushing, Okla., was eliminated and West Texas Intermediate rose to the world crude price, instead of the world crude price coming down. That, combined with the mass production of the 12-liter Cummins (CMI) truck engine, will have made LNG too cheap not to switch to it.

That's what Sam Thomas, the CEO of Chart Industries (GTLS) -- which is at the heart of the natural gas revolution -- told me when we chatted Tuesday night. Those two events simply made the whole deal too economic to not do. That price differential eliminated any hope, in the minds of the big shippers, that diesel would come down enough to render it reasonable to stick to it vs. a fuel half its price. Truckers, after all, would now be relying on Cummins to produce the engine that burns it. Reliability and inexpensive fuel made a value proposition come true, and without any government monkeying around the subsidies needed.

How fast will it happen? It only took seven years for diesel to go from being a pretty unknown fuel to being the only fuel for trucks. Sam says it will pretty much be the same for nat gas when the infrastructure's built out. The big change here, by the way, is that all of the major gas station owners are talking about having LNG tanks, according to Sam. Chart, moreover, has a huge backorder of on-the-go filling stations for those who want to turn their fleets from diesel to natural-gas-burning vehicles. Sam says that, if we measure the adoption by looking at the percentage of new nat gas trucks being ordered, we will be able to grasp the enormity of the change.

How about cars? That's much tougher, Sam points out, because the car companies are always getting new mandates from the government: more gasoline mileage, more ethanol, more electric. They don't want to offer any more different kinds of vehicles if they can avoid it.

But trucks? It's happening right now.

At last.

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